Tilden Moschetti: It is not
uncommon for me to meet a client

for the first time and them to
explain that they have four

different projects that are all
very different from each other.

And want to know should they put
this under one umbrella or how

to organize everything. It's my
name is Tilden Moschetti, I am a

syndication attorney with the
Moschetti syndication Law Group,

I'm gonna go through how I would
if I were them organize those

projects

so a lot of times private equity
funds will look at a series of

projects and try and make a
decision on whether or not to

put them all in one under one
umbrella, or to separate them

out. So I'm going to talk to you
about the pros and cons about

putting them all under one or
the how to how you do it, or

separating them out and why
you'd make that decision for

your own. Now, it doesn't have
to be a private equity fund or a

syndication or whatever it is,
put those terms beside. So let's

say you've got five, four
different projects that you're

all trying to raise money for,
and you're trying to figure out

the best way to do it. So that's
the most pragmatic way to think

about it, just put the terms
aside. So let's open up a

whiteboard. Because that will
make it a little bit easier to

explain. So let's make up for
projects. Let's say you have a a

business that you want to raise
money for it's in the services

sector. And I'm making this up
as we go. Number two, let's say

you have a, a crypto mining that
you want to do. So you have a

business that wants to do it,
it's professional services, or

some sort of services. Number
two, you have a crypto mine that

you want to raise money for
number three, you have a an

apartment building.

And just for fun, we're going to
make one also in real estate

just so that we can talk about
that a little bit more

extensively. So then let's say
we've got a triple net, which is

you can think of like fast food
restaurant or something like

that. So we're gonna pay is all
of the operating expenses of

everything. So you've got these
four different business lines

that you all want to raise money
for. But you need different

things, let's say each one needs
just first, let's say each one

needs one a million dollars,
just because each one needs a

million. So you can either do
what $4 million arrays, which

might seem like the easiest
thing to do, right? So you would

have your entity your investment
entity here. And it would have

all four projects that you are
raising that $4 million for.

Now, you could do that. But I
want you to think of also or

actually let's talk about the
the other alternative. Or you

could have four different
entities that people invest in

to

write each for a million. And
just because we can, let's say

you also have this one where you
have the option of an entity,

just a real estate, one that
also invest in both of them.

That's also a reasonable way to
shape it. So those are sort of

the three different structures
that you can think of. Now the

very first thing I like to think
of when I'm putting together any

kind of deal is my founders
investment theory. Again, if you

need to watch it, I've got
videos on here that describe

founders investment theory, but
essentially what it is, is you

can think of it as that story
that makes you why somebody

should invest in you, right. So
why somebody should give this

money. And so if you put
yourself in the thought process

of what an investor would be
hearing is that that would be

the way I would think about it.
So if I was trying to pitch this

first deal, right if I was
trying to pitch this $4 million

he'll, then I would have to go
to my investors and say, look,

I've got a conglomerate, I've
got four different things that I

that we're going to invest into,
and you're gonna get

distributions in these four
different ways for these four

different business lines, you
can do that, but it's going to

be kind of confusing to an
investor. Why four different

things? I mean, you've got
things all over the map here,

don't you specialize in
anything, you know, what's

special thing are you bringing
to the table here, it's gonna be

a really real big challenge to
raise money, raise $4 million

for four totally different
things, or at least three very

different things. And two of
those things are fair, two, new

two things are somewhat similar.
Or you could go to them and say,

look, I've got, I've got three
investment vestments that I'm

looking to raise money for. One
of them is a business is a

services business, and you're
going to get a piece of the

equity. But we're going to do
that on you'll have an option to

convert it into the prefer into
the that into it, because we're

going to pay you a fixed
percentage of 10% a year. And

then after two years, when we've
shown we're successful, you can

convert it into real equity into
the business. It's a great

business, here's what it does.
The second thing that I'm

raising money for is a crypto
mine, and here's how it makes

money. And you're going to
immediately own equity in that

business and just be getting the
profits off of what what we've

invested. And we'll have, we're
also raising money for an

investments. Now we
diversification is important. So

we're going to do something
that's kind of unusual, we're

going to invest in an apartment
building, and we're going to

invest in this fast food triple
net. And the reason that we're

doing that is because should
something happen in the economy

in these uncertain times, we
want to be able to balance and

make sure that you know, you're
always making money. And so if

fast food suddenly stops making
money at a at a reasonable rate,

if the appreciation and just
isn't happening, you know that

that apartment buildings still
gonna go up. Or if you know

that, because of some new laws
about rent control, or whatever

it is apartment buildings start
to stagnate, we've now got this

fast food business that's going
to carry that load and make sure

that you have a good investment.
So at the end of the day, you

have a nice balance between two
different types of real estate

that are just ultimately going
to make your portfolio more

valuable. That would be how I'd
pitch it. In that scenario, in

the fourth version, over here,
it separate them out into

individual things, you just talk
about apartment buildings and

triple nets in a different way.
Now, obviously, the number two

and number three way is the
easiest way to pitch a pitch.

And it's probably the way that
you're going to be most

successful. So I would probably
recommend that almost always

you're going to separate them
into distinct different units.

Now, sometimes you will have
distinct units within one

individual investment. So you
could in your business services,

say look, we have two different
mechanisms here. So in this

business, let's move this off
here. In this business, that's a

certificate, we've got two
different ways of paying you and

one is a Class A preferred. And
one is a class. A common and

what that means to you investor
is that the class a preferred,

they're going to get paid first
no matter what. So they're

always getting paid. But they're
only getting paid 10%. Right. So

even if this company starts
making a trillion dollars per

unit per, per share, you're only
going to get 10% of the money

that you invested on top of it.
So you're going to be making

that return. Why if you think
this is a great business, maybe

you want to come in along this
class a common now we're not

going to pay out a preferred
return at all, we're not going

to pay 10% There's no no
guaranteed income, it's probably

not going to pay anything out
over the next two or three

years. But you know, we're
planning on doing or planning on

going public in in three years.
And you've seen boy IPOs go and

you'll probably all that equity
is going to be equity you're

going to be carrying in to the
IPO before it even happens. So

that means you're going to get
this huge amount of appreciation

in the value of the company and
then you can sell the stock at

that point. So those are the
kinds of pitches that you would

do. Now here you've got two
different classes of shares. So

sometimes the point is, is that
you'll have something that is

two very distinct kinds of
investment. But that's under

what that still goes under one
umbrella. So we'd still net

probably put this under one
offer, as we call it.

Insecurities language. So I hope
that helps describe, well, why I

would separate these into
multiple classes like this into

I mean, into multiple
investments, multiple offers

different things entirely, is
the reason again, is just that

you want to make the story as
clear as possible to investors.

Now, here's an asterix. Just a
disclaimer, yes, I'm a real, I

am a syndication attorney, I put
these offers together, and I do

get paid more by splitting them
out into four parts. But at the

end of the day, your investors
are probably the ones paying my

fees. They're the ones that you
get reimbursed for it. But also,

it's gonna be that much easier
for you to raise funds for. I

always leave the actual decision
making completely up to my

clients, if they want to do it
like this, with this $4 million

raise. Absolutely, I'd be happy
to write it. We can make it as

good as possible and give you
every opportunity to be able to

raise that $4 million. My advice
if you want an easier time

raising money would be to split
it up into four units or three

units. So I hope that helps
describe what you do in those

situations where you've got four
different things you want to

raise money for and they're all
very different. My name is

Tilden Moschetti. I am a
syndication attorney with the

Moschetti syndication Law Group.